Fitch lowers Kofax

Fitch Ratings said it downgraded the long-term issuer default rating for Snow Borrower Inc. and Snow TopCo Ltd. to B- from B. At the same time, the agency withdrew the IDRs. Fitch also cut the rating for Snow Borrower's first-lien term loan to B+ from BB- while the recovery rating remains RR2. The second-lien term loan is downgraded to CCC from CCC+ and the recovery rating remains RR6.

“The downgrade of the instrument ratings reflects the one-notch downgrade of the IDR. At the same time, the rating for the first-lien and second-lien term loans are being withdrawn. These entities were reorganized by the private equity sponsors,” the agency said in a statement.

Concurrently, Fitch assigned Kofax CayCo, Ltd. and Project Leopard Holdings, Inc. a B- long-term IDR. These entities are the parent and borrower for its wholly owned subsidiary which operates as Kofax. Fitch also assigned Project Leopard's first-lien term loan and revolver B+/RR2 ratings and the second-lien term loan CCC/RR6 ratings. The outlook is negative.

Collectively, Kofax CayCo, Project Leopard, Snow Borrower and Snow TopCo are referred to as Kofax.

“The downgrade of the IDR reflects Fitch's concerns about the company's revenues, lower expectations for EBITDA margins, high leverage and negative FCF. At the same time, the credit profile benefits from Kofax's highly diverse customer base, recurring revenues and expectations that FCF should be positive in 2024,” the agency added.

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